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DIGITAL EQUIPMENT CORPORATION REPORTS YEAR-END RESULTS

 DIGITAL EQUIPMENT CORPORATION REPORTS YEAR-END RESULTS
 MAYNARD, Mass., July 23 /PRNewswire/ -- Digital Equipment


Corporation (NYSE: DEC), the world's leading supplier of network computer systems and services, today announced operating results for the fourth quarter and full fiscal year that ended June 27, 1992.
 For the quarter, the company absorbed an operating loss of $188,069,000, before a restructuring charge of $1.5 billion. This charge was primarily for employee separations, facility consolidations, and related administrative costs. The net result for the quarter was a loss of $1,855,132,000 or $14.76 a share, compared with a loss of $871,318,000 or $7.08 per share for the same period a year ago.
 For the full fiscal year ended June 27, 1992, net loss was $2,795,507,000 compared with a loss of $617,427,000 last year. The current year's loss includes a charge of $485,495,000, applied retroactively to the first quarter of the fiscal year, for the one-time cumulative effect of an accounting change. This charge was created by the implementation of Statement of Financial Accounting Standard No. 106 -- Employer's Accounting for Postretirement Benefits other than Pensions. Results for the first three quarters also have been restated to reflect the impact of $51 million additional expense resulting from the change in accounting as of the beginning of the fiscal year. On a per share basis, the loss for the year was $22.39, including $3.89 for the one-time cumulative effect of the accounting change. This compares with a loss of $5.08 last year.
 For the quarter, the company reported total operating revenues of $3,905,784,000 down 1 percent from the $3,944,859,000 of a year ago. For the full fiscal year, total operating revenues were $13,930,872,000, essentially flat with $13,911,004,000 last year.
 Kenneth H. Olsen, President, said, "In 1992 Digital unveiled the fastest and most powerful chip technology in the industry. At the same time, our financial results continue to disappoint us. We face an economic slowdown in virtually every major geography, particularly in Europe and Asia. We are taking actions designed to increase revenues, increase market share, reduce costs and improve our efficiency."
 Product revenues declined due to several factors including a continuation of weak economic conditions, highly competitive pricing, and the negative impact of foreign exchange rate movements. The company continued to ship more computer systems compared with the prior year, at a lower average price per system. The company's services revenues continued to grow, so total revenues were essentially flat year-to-year. The company's overall costs remain too high for this level of revenue, resulting in operating losses for both the quarter and the year.
 John F. Smith, Senior Vice President, Operations, commented on the results, "Our game plan for recovery remains intact: continue cost reductions, generate revenue growth, and manage the balance sheet. While we've made progress in some areas, we need to continue the effort and do more. We intend to continue the cost reduction efforts," he added. "As a result, the Company absorbed a restructuring charge of $1.5 billion to be used for employee separations, plant consolidations and associated costs. While our goal is to return to profitability as soon as possible, for the remainder of 1992 we remain cautious about both revenues and profits due to the uncertainties in both the industry and worldwide economies."
 "To generate revenue growth in the current environment, we have several efforts underway," Smith continued. "We demonstrated our industry solutions to over 30,000 existing and new customers at our DECworld exhibition in May. Recently we laid out a clear and consistent upgrade path to take our customers into the future with Alpha, and we are encouraged by the customer response. Last week we announced new VAX systems that are board upgradeable to the Alpha platform."
 "Our cost reduction efforts continue," Smith added. "Total headcount was 126,000 at the end of fiscal year 1989. Over the last two years, we have added an additional 11,000 employees primarily through acquisitions while reducing overall headcount. At the end of this year headcount was 113,800, for a total reduction of more than 23,000 since 1989. This included 3,700 people in the U.S. who left through a special early retirement program last quarter. In addition, over the past few years, total occupied floor space has declined by 9.2 million square feet, due to facilities that have been closed or consolidated," Smith added.
 "While total cash was reduced from $1.9 billion at the beginning of the year, to $1.3 billion due primarily to restructuring costs, acquisitions, investments and the operating loss, we have a focused effort on cash conservation through management of receivables, inventories and working capital. In addition, the company's substantial debt capacity leaves it well positioned to ensure adequate cash balances to support operations while continuing to maintain a conservative capital structure."
 Digital Equipment Corporation, headquartered in Maynard, Mass., is the leading worldwide supplier of networked computer systems, software and services. Digital pioneered and leads the industry in interactive, distributed and multivendor computing. Digital and its partners deliver the power to use the best integrated solutions -- from desktop to data center -- in open information environments.
 DIGITAL EQUIPMENT CORPORATION REPORTS YEAR-END RESULTS
 Fourth Quarter Ended:
 June 27, 1992 June 29, 1991
 Product Sales $2,143,345,000 $2,343,195,000
 Service & Other Revenues 1,762,439,000 1,601,664,000
 Total Operating Revenues 3,905,784,000 3,944,859,000
 Cost of Product Sales 1,220,059,000 1,113,891,000
 Service Expense 1,085,419,000 910,255,000
 Total Cost of Sales 2,305,478,000 2,024,146,000
 Research & Engineering 485,241,000 445,572,000
 Selling
 General & Administrative 1,303,134,000 1,281,016,000
 Restructuring Charge 1,500,000,000 1,100,000,000
 Net Interest (Income)/Expense (13,783,000) (16,091,000)
 Loss Before Income Taxes (1,674,286,000) (889,784,000)
 Income Taxes 180,846,000 (18,466,000)
 Net Loss (1,855,132,000) (871,318,000)
 Average Number of Shares
 Outstanding 125,691,368 122,986,814
 Net Loss Per Share $(14.76) $(7.08)
 Operating Results for the 12 Months Ended:
 June 27, 1992 June 29, 1991
 Product Sales $7,696,029,000 $8,298,515,000
 Service & Other Revenues 6,234,843,000 5,612,489,000
 Total Operating Revenues 13,930,872,000 13,911,004,000
 Cost of Product Sales 4,248,118,000 3,905,355,000
 Service Expense 3,883,705,000 3,373,025,000
 Total Cost of Sales 8,131,823,000 7,278,380,000
 Research & Engineering 1,753,898,000 1,649,380,000
 Selling
 General & Administrative 4,680,822,000 4,471,629,000
 Restructuring Charge 1,500,000,000 1,100,000,000
 Net Interest (Income)/Expense (57,659,000) (68,665,000)
 Loss Before Income Taxes &
 Cumulative Effect of Change
 in Accounting Principle (2,078,012,000) (519,720,000)
 Income Taxes 232,000,000 97,707,000
 Loss Before Cumulative Effect
 of Change in Accounting
 Principle 2,310,012,000) (617,427,000)
 Cumulative Effect of Change in
 Accounting Principle, Net of Tax (485,495,000) ---
 Net Loss (2,795,507,000) (617,427,000)
 Average Number of Shares
 Outstanding 124,864,122 121,557,705
 Loss Per Share After Taxes
 Before Cumulative Effect of
 Accounting Change $(18.50) $(5.08)
 Loss Per Share on Cumulative
 Effect of Accounting Change $(3.89) ---
 Net Loss Per Share $(22.39) $(5.08)
 Q4 - FY92
 Product sales $2,143,345,000
 Service and other revenues 1,762,439,000
 Total operating revenues 3,905,784,000
 Cost of product sales 1,220,059,000
 Service expense 1,085,419,000
 Total cost of sales 2,305,478,000
 Gross margin 41 pct.
 Research & engineering 485,241,000
 SG&A (selling, general & administrative) 1,303,134,000
 Restructuring charge 1,500,000,000
 Operating income/(loss) (1,688,069,000)
 Interest income (24,447,000)
 Interest expense 10,664,000
 Income/(loss) before income taxes (1,674,286,000)
 Taxes (total federal, state & foreign) 180,846,000
 Net income/(loss) (1,855,132,000)
 EPS $(14.76)
 Average shares outstanding 125,691,368
 BALANCE SHEET/CASH FLOWS - Q4 FY92
 Cash & temporary cash investments $1,337,172,000
 Accounts receivable (net) 3,594,268,000
 (RE: A.R. days sales outstanding) 83 days
 Inventories: raw materials 264,871,000
 work in process 495,632,000
 finished goods 853,531,000
 Total Inventories $1,614,034,000
 Prepaid expenses 352,570,000
 Deferred income tax charges, net 222,794,000
 Total current assets 7,120,838,000
 Net property, plant & equipment 3,569,702,000
 Total assets 11,284,309,000
 Short term debt (current portion of LTD) 49,061,000
 Total current liabilities 5,106,048,000
 Deferred tax credits net 23,033,000
 Long term debt 41,636,000
 Postretirement benefits 1,182,658,000
 Total liabilities 6,353,375,000
 Stockholder's equity 4,930,934,000
 Book value per share $38.58
 Capital spending (addition to PP&E) - quarter 260,987,000
 Depreciation & amortization - quarter 205,198,000
 Capital spending (addition to PP&E) - year 710,436,000
 Depreciation & amortization - year 832,828,000
 Non U.S. revenues - quarter 2,479,764,000
 or 63 pct.
 Non U.S. revenues - year 8,798,864,000
 or 63 pct.
 Total employee population approximately 113,800
 -0- 7/23/92
 /CONTACT: Bradley D. Allen of Digital Equipment, director of investor relations, 508-493-7182/
 (DEC) CO: Digital Equipment Corporation ST: Massachusetts IN: CPR SU: ERN


CN -- NE002 -- 2327 07/23/92 09:37 EDT
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